Tabcorp enters final stage of spin-off; TLC will begin trading on June 2

Posted: June 1, 2022, 9:27 a.m.

Last update: June 1, 2022, 9:27 a.m.

Tabcorp is completing the final stages of its planned spin-off. The Australian games company is in the process of splitting up its various operations, with the next two days ending everything.

Tabcorp Offices
Tabcorp offices in Australia. The game company has almost completed the spin-off of its various businesses. (Image: Tabcorp)

Tabcorp has executed the plan to spin off The Lottery Corporation (TLC), according to a company announcement released today. The plan is effective as of today and TLC shareholders will receive holding statements on June 3.

From tomorrow, TLC will begin trading its shares on the Australian Securities Exchange on a normal settlement basis under the ticker symbol TLC. The number of issued shares is 2,225,771,703. The implementation of the program nearly completes the separation of Tabcorp’s lottery operations from its betting, media and gaming services.

Tabcorp crosses the finish line

Tabcorp shareholders showed strong support for the split when they voted last month. 98.78% of the votes supported him, with only 0.17% against. After clearing that hurdle, the New South Wales Supreme Court also approved the split soon after.

The group submitted a copy of the court orders to the Australian Securities and Investments Commission (ASIC) on May 23. The plan will then come into effect from that date.

Tabcorp decided to keep its betting business, but separated the lottery business, creating two separate companies. One of these companies became TLC. These are primarily all operations previously run by Tatts before Tabcorp acquired the company. TLC, however, does not include game services.

New Tabcorp, the second company to emerge after the split, includes those gaming operations, as well as betting and media services. The shakeup comes after Tabcorp unsuccessfully tried to find a buyer for its betting and media businesses.

Create value for shareholders

Tabcorp’s stock price has fallen recently, but shareholders still have value. Tabcorp’s market capitalization was approximately $11.9 billion before the split. This figure is based on the number of shares issued and a share price of $5.34.

For each Tabcorp share held, eligible shareholders receive one TLC share. This means that there are 2,225,771,703 shares available for Tabcorp and TLC.

Post-split, Tabcorp’s market capitalization is approximately $2.3 billion, factoring in fluctuations as the situation stabilizes. With TLC shares selling at around $4.63, its market capitalization is around $10.3 million. This creates a combined market capitalization of $12.6 billion, or $700 million, or 5.9% more, than Tabcorp’s pre-split value.

Upcoming C-level changes

Two new companies; two new groups of leaders. David Attenborough, former managing director and CEO of Tabcorp, will retire. Adam Rytenskild will take over both positions.

Additionally, Steven Gregg is retiring as Chairman and Non-Executive Director. However, he doesn’t go far, as he will take on both roles at TLC. For Tabcorp, Bruce Akhurst will become president.

Adam Newman, Tabcorp’s CFO, is moving to the same role at TLC. Daniel Renshaw became Tabcorp’s chief financial officer. Patrick McGlinchey, who was also Tabcorp’s chief legal and risk officer, is also moving to TLC, while Chris Murphy will continue as Tabcorp’s corporate secretary.

Raelene Murphy, Brett Chenoweth and Karen Stocks now serve on Tabcorp’s board as non-executive directors. Additionally, Anne Brennan and Harry Boon resigned from the Tabcorp board to become non-executive directors of TLC.